1. Keep playing and spending more money hoping that you’ll win or at least break even, or
2. Walk away from the game and do something different.
The game that we’ve been losing as Sierra Madre taxpayers is paying for CalPERS as the pension plan for all our city employees. Or as we call CalPERS pensions on The Tattler, Platinum Pensions.
Why do we call them Platinum Pensions? Well, let’s go to the current issue of CalPERS Facts at a Glance (link) for the info.
Let’s see, if you started at age 22 and worked the average 20.4 years, you’d be 42.4 years old. According the CalPERS site and I quote: “The minimum retirement age for service retirement for most members is 50 years with five years of service credit. You could start another job at 43, start your CalPERS pension at 50, and also collect your 401(k) retirement from 1 or 2 more jobs!
But wait, there’s more!
You know those poor fools that work in the private sector? When their 401(k) doesn’t grow fast enough, or loses money, they get less of a retirement check. But not the CalPERS Sierra Madre employee. Down markets mean never having to say you’re sorry. Why is that? Because CalPERS assumes it makes 7.5% a year on your money. Even when it really doesn’t. Check out the returns for 2015.
In the real world, CalPERS had a net rate of return for the fiscal year ending 6/30/2015 of 2.4%. For the calendar year ending 12/31/2015 they lost 0.1%
Losing money? No problem for Sierra Madre employees. CalPERS will just bill the City, um, taxpayers, for the shortfall. The sky’s the limit. Now how much would you pay?
But CalPERS isn’t done. There’s also the problem of the current shortfall in the fund:
CalPERS is funded at a sorry 76.3% for 2014. Heck, in 2010 they were at 65.4%.
So What Can Sierra Madre Do?
We know that CalPERS has been killing Sierra Madre (among other cities) by continually raising the city’s CalPERS assessment each year.
This will get even worse when they give the SMPD a fat raise in the upcoming contract (along with their shiny new badges.)
Your City Council can stop CalPERS from robbing us. All they need to do is sign the contract to make the Los Angeles Sheriff’s Department (LASD) our full time police force. You know, besides the 6PM to 6AM protection they provide already.
What this means:
1. Sierra Madre’s CalPERS assessment would start to decrease each year because we’d no longer be paying for the SMPD.
2. We would benefit from a larger, better trained department with way more depth in vacation & sick coverage. Vacancies would NEVER be a problem.
3. The deputies would have their pensions through Los Angeles County Employees Retirement Association (LACERA). As of 2014, LACERA is 79.5% funded.
Is LACERA as good as CalPERS? Is it good enough for the men and women who protect us from the bad guys? It should be. It’s good enough for the retirement plans for:
1. Past Sierra Madre Mayor Nancy Walsh
2. Dr. Janice Nelson, the spouse of past Mayor Doug Hayes, and
3. Past Mayor (and current LA County employee) John Harabedian, Jr.